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AIG Squares Off With Malaysia

Insurer Asks Government to Grant
New Exemption From Incorporation

By

Leslie LopezStaff Reporter of THE WALL STREET JOURNAL

Updated Aug. 15, 2003 12:01 a.m. ET

KUALA LUMPUR, Malaysia -- Global insurance giant American International Group is resisting demands by Prime Minister Mahathir Mohamad's government that it locally incorporate its two Malaysian operations, which control 15% of the country's life- and general-insurance market.

American International Group, the only insurer that hasn't complied with a 1989 Malaysian law requiring foreign-owned banks and insurance concerns to incorporate locally, recently applied for dispensation to avoid restructuring the Malaysian branches of...